The OFT has launched a consultation on moving towards a new approach to the setting of fees for consumer credit licences.
Under the current fees structure the only cost distinction made between businesses applying for or renewing their licence is whether the applicant is either a sole trader, or a corporate body or partnership. The credit regulator believes this system is too simplistic to take account of the different costs arising from its risk-based approach to regulation and that a new structure is needed to ensure fees are fair and proportionate.
The consultation proposes a number of criteria that might be chosen to differentiate between classes of applicant. These include: type of business type of credit activity number of categories applied for size of credit business and overall size of business.
The OFT is also asking for comments on the current circumstances where applications are exempt from charge, such as for charitable debt advice agencies, and whether these should continue or be amended.
Respondents have until 11 March 2010 to respond to the consultation. The OFT will take account of the responses in its report to the Secretary of State for Business, Innovation and Skills. It will then develop one or more revised charging structures which it will test during 2010/11, before seeking Government’s agreement to its preferred option. The new fee structure will come into force from April 2011.
